The Filecoin price has declined in the past four straight days as investors continued worrying about the ongoing market conditions. The FIL price is trading at $74, which is about 38% below the highest level this month. This decline means that the coin is in a deep bear zone.
Why FIL is tanking
Filecoin is a blockchain project that is disrupting the file storage industry. The project’s goal is to make it easy for people and companies to store their documents, files, and even non-fungible tokens (NFT) in a fully decentralized ecosystem.
Contrary to the popular belief, Filecoin does not aim to take market share or even disrupt the business model of established brands like OneDrive and Google Drive. Its goal is to complement the industry and give developers an alternative platform that is built using decentralized tools.
Today, Filecoin is used by many blockchain and regular companies. For example, it is used by Dapper Lab, Mask Network, Near Protocol, Hedera Hashgraph, and even OpenSea.
The Filecoin price has crashed in the past four straight days as investors continue worrying about the financial market and the collapse of Evergrande, the giant Chinese developer. This risk has pushed the crypto fear and greed index to the extreme fear zone of 27. The conventional CNN Money fear and greed index has also declined to 24.
Still, these fears are likely overblown considering that the Evergrande crisis will have an impact mostly in China. Also, the risks an American government default are relatively minimal.
Filecoin price prediction
The daily chart shows that the FIL price has been under intense pressure lately. The coin has even declined to the 78.6% Fibonacci retracement level. It has also formed a head and shoulders pattern and is declining below the 25-day and 50-day moving averages. The chart has also moved to the Ichimoku cloud.
Therefore, there are downside risks in the near term, with the next key support level to watch being at $60, which is at the lower side of the Ichimoku cloud. On the flip side, a move above the key resistance at $80 will invalidate the bearish view. In my previous Filecoin forecast, I noted that the coin would rise to $100, which it did.